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Burlington Stores Inc BURL

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Despite Our More Favorable Reaction to Burlington’s Quarterly Earnings, Its Shares Seem Rich

Zain Akbari, CFA Equity Analyst

Analyst Note

| Zain Akbari, CFA |

Market sentiment regarding narrow-moat Burlington’s second-quarter earnings announcement is negative (shares down 9%), but our take is more neutral as our near-term expectations were conservative and we see little reason to doubt the firm’s long-term prospects in the light of the news. Neither our $220 per share valuation nor our long-term outlook (normalized mid-single-digit revenue growth and low-double-digit adjusted operating margins) are likely to change significantly. Nonetheless, we suggest investors await a more attractive entry point.

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Company Profile

Business Description

The third- largest American off-price apparel and home fashion retail firm, with 761 stores as of the end of fiscal 2020, Burlington Stores offers an assortment of products from over 5,000 brands through an everyday low price approach that undercuts conventional retailers' regular prices by up to 60%. The company focuses on providing a treasure hunt experience, with a quickly changing array of merchandise in a relatively low-frills shopping environment. In fiscal 2020, 21% of sales came from women's ready-to-wear apparel, 21% from accessories and footwear, 19% from menswear, 19% from home décor, 15% from youth apparel and baby, and 5% from coats. All sales come from the United States.

Contact
2006 Route 130 North
Burlington, NJ, 08016
T +1 609 387-7800
Sector Consumer Cyclical
Industry Apparel Retail
Most Recent Earnings Jul 31, 2021
Fiscal Year End Jan 29, 2022
Stock Type Cyclical
Employees 55,959